tv Closing Bell CNBC April 15, 2010 3:00pm-4:00pm EDT
and also, bob pisani and sharon epperson, and bertha coombs and steve liesman, our economics reporter is in charlotte. guys, the market is moving today on the positive news about the economy. we are getting started to see some continued signs of job growth. and the traders are, are they buying into the idea that the recovery is for real? bob pisani, what are you seeing? >> yes. and slowly, but surely, the news is better. i started to feel better at the end of february when the retail sales for february looked better and now we are seeing the transportation number for february and rail car shipments better and slow capacity up incremental, and also the highest levels since september here on the big board, so if you don't think that the economy is getting better, you are not paying attention. >> well, we are seeing some signs that the economy are definitely improving, but job growth is at the end of the day
what we are waiting for, right, steve liesman, what are you hearing? >> yeah. well, we had three pieces of data today. the empire state, had the jobless claims number and the philly fed, and one more, the philly fed was good and the empire state was good and the hb was good, and the jobs are the outlier, maria, and i guess that we have the hold on, because what the government has told us is that the last two weeks of the jobless claims have been essentially outliars because of the holiday, the easter holiday, and i'm telling you that if next week does not show improvement a lot of people are going to lose faith in the ability of the economy to create jobs. >> sharon? >> well, some of the economy traders and the oil traders and gasoline traders have lost faith looking at the job numbers and the unemployment rate where it stands right now, and saying we don't see the energy demand coming back to support prices at the levels that we are currently seeing. that being said, there is a whole other camp saying, hey, when you look at the demand around the globe outside of the
u.s. and europe and you look at asian demand and looking at the chinese gdp da ta out today, and look algt ting at the back of te oil, and for the back of the curve for the december contract, it is prices of $90 a barrel and up 75 cents today. they are looking at the spreads and the wide global impact and the price down the road. >> well, it is judgment day, and now that we are firmly in the earnings reporting season, simon, now we are actually going to get yea or nay. are the earnings there to back up what has been certainly anticipated by the investors? >> well, sharon is absolutely on the money to mention the growth we got. did you see the singapore figure today? >> amazing number. >> and the number on the big board is the fact that you have a 15% gain on the s&p in nine months which is extraordinary. if you are saying that we knock
the idea of double-dip off of the table, it is perfectly acceptable to run it like that, but my question is, does the stock market, bob pisani, say that the quality stocks are rising on that basis or is this a rush for the underperformers as fund managers looking to try to match the performance? is this a rush with some, perhaps not such quality stocks rising to the top? >> well, it should be that way, but it is not. this is one of the broadest rallies i have seen in a long time, except for the last couple of days, even the consumer stocks have been doing well. recently, the last couple of days the consumers are underperforming. look, i share the concern about the job growth. if it is not there, it is a problem, but the stock market is not acting like there is going to be a problem. if anything in the last week, oceans of cash are coming in. i called the desks and the managers, and the portfolio managers are covering to have more stock exposure and not less. >> bob, talk more about, that because you are seeing some piles of cash on the sidelines, but we have been talking about this for some time that we have a lot of money on the sidelines.
are we at a point where the cash on the sidelines is going to come into play and sort of kick start the second leg of the rally or stay on the sidelines? there is no gauarantee, because it is on the sidelines it comes on the market? right. >> maria, if you are sitting back waiting for a pullback with cash, it is not coming, so do you wait for the pullback or jump in as a retail investor, they will dump and sell off? >> that is the fear, you are right. >> the people who have not gone into the market are really aware of and i hate to be the heretic here, but as we started six months ago, this is a market that is still on emergency central bank funding. these are markets that are pumped full like ducks with corn on central bank funding. and ultimately, that is not the -- people out there know it is not sustainable. that not right. >> well, i don't think that the numbers back that up, simon.
the numbers would show that the private sector money is on the sideline as well as the central bank money. most of that money in excess reserves remains in excess reserve as it is not the stock market. >> i'm sorry, steve. if you are in this environment, you can borrow money cheaply and put it in the stock market and make 15% in nine weeks. that is the artificiality of the whole thing. >> and that is what people have done. >> and think about what you are saying, simon. if the money stays on the sideline, it means de facto that interest rates remain low. or the money comes into the stock market and the stock market rises, unless this cash or the liquidity is destroyed, simon, it has to go somewhere. >> my point is that -- >> not at the same time. >> there are two sorts of people here. those who would borrow with ease and trade the market professionally who will borrow and invest and that what they are doing around the world and the carry trade, and that is why the stock market is rising. and those sitting at home with their own money are much more
fearful, because it is a real life consequence of the market going down. they would be more mindful of what the nor half is doing and why. that is why the people are sitting on the sidelines. >> simon, i would just challenge you to show me the data that says this is leveraged rally. i don't see that in the data. i haven't seen it, but maybe bob knows. >> no, i haven't seen it either. >> but on the seedlineideline, d on the volume of the stock market, we see it there, but in oil and volumes in this week in this market, a lot of folks want to put money to work here. we have seen a new leg higher here for oil prices, and a lot of that has to do with the volumes coming in and the momentum that is in this part of the market. >> well, it is one of the guests over the last week who said it is really the retail investor who stayed on the sidelines who has been fearful about what you are talking about, and who has been reluctant to put that money to work, but it is the institutions who actually have been trying to make real money
on trading. >> yes. >> and the trader today, for a fund who said, look, we are fully invested and part of the reasons you are seeing that the volumes are low is that we are waiting for the retail investor to come in and we trade around the edges, so we don't put new money to work. >> and a quick stat, maria, $7 billion has come into u.s. equity funds in april so far according to the trent tabs and that is more than normal and april is a big month because of the tax inflows. >> that will have a impact no doubt about it. and we will see what rick santelli thinking, because he has a opinion on all of this and he is at the cme group right now, and rick, weigh in right now. >> well, i liked looking at the data today, and the tick data, china was for the fourth month was a liquidator and not a large number, but you have to pay attention when you have the debt we need to sell. and the second thing, a runup of 24,000 on claims and run up of
23,000 on continuing claims and i know supposedly an effective easter and those are the numbers and much more elevated than many traders would like to see. you talked about the 9.7 unemployment, and these are issues that of course were offset to some extent by better philadelphia and better empire, so there is a manufacturing element that is proving to do pretty well. look at the charts, and 10-year down a couple of basis points, but the continuing ongoing story is that we are not at 4% like we were nervous about at the end of the last quarter. indeed, at the end of this month, we will get first quarter gdp which looks at a three-handle down than we finished up on the fifth quarter. now to brass tacks, let's look at the chart of the day, the crb index which is playing with the highest levels of the year and contrast wit the dollar chart. certainly the dollar has come down, but nowhere near the lowest levels of the year. usually a stronger dollar is lower commodity prices, so what i am getting at is not why commodities are going up, u what
it may mean as a sector moving forward when the energy prices are in vogue, because it is getting warm out. maria, back to you. >> thanks a lot, rick santelli, in chicago. we have 50 minutes before the "closing bell" sounds on wall street. and now on the dow jones, it is up, and nasdaq is stronger and we are waiting on google, simon? >> and ahead in the program, he called the bubble in technology and the bubble in house and called the lost decade. you can't afford the miss what he has to say next. the man who heads the biggest hedge fund in canada. and analysis and reaction to google's first quarter earnings. >> and the new york stock exchange is led by citigroup today just below $5. hey can i play with the toys ?
sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with an endless automated system. you can talk to a real person 24/7. it's just the right thing to do.
the calls he has made. he began to warn about a long-term secular term in stocks. and just see how canada has performed against oil and gold in the last ten years, and you can see how the calls have paid off. he is here with me today and ringing the closing bell at the nyse and joining me with an exclusive cnbc interview, eric sprott. >> wonderful to be here. >> what great insights you have had on the market, and that why i want to start with equities. i know you want to look at a gold and commodities, but given the fact that the market is up as much as it is from the lows and here in the middle of the earnings season. do you buy into the rally we have seen in equities? >> well, i have not bought in and obviously wrong since march of '09. i still have a deep, deep concern about the leverage in the banking system which i have expressed that view over the last decade. i look at the inability of
governments who are spending vast amounts of money to generate much growth in gdp, and in fact, there is some excellent work done on how the marginal value of a government dollar spent is now negative. i could give you the example of running a $1.5 trillion deficit last year and gdp up $200 billion. so we are not getting much bang for the buck, but we owe the buck at the end of the year as we will at the end of this year. i very much worry about that. i also worry about what is going on in china, and the chinese government has asked the banks to cool down the lending. the latest payout in march shows that lending went from $300 billion the $100 billion. >> right. >> and i look at $200 billion less a month which is $2.4 trillion less a year if it were to stay that way, and obviously, has to have an effect on the economy as the lending of $2 trillion did positively this year. >> yes, these are big numbers. so do you think that the idea that china is rising so much,
and we have all of the demand, and that is really has been riding this wave of making money in the commodity space, and solve to producers. >> yeah, yeah. >> and do you think it is slowing down now? >> well, when you look back at china in '09, they had a $4 trillion economy and they lent $2 trillion the people, and they had a $600 billion stimulus, and $2 trillion lending and $600 billion stimulus should generate gdp growth and i'm not convinced that 10% growth which would be $400 billion is a good response to the measures taken. >> really interesting. let me ask you about the launch of the sprott physical gold trust going public on the nyse in february. tell me about the trust. you called it the sprott physical gold trust. >> well, i should point out not withstanding the fact that we are in the financial gold of the world, toronto is the mine financing in the world, and some
think resource financing in the world, and we are part of it. our view was that we could come up with a better vehicle than the spider gold trust and we have a much better vehicle than the spider gold trust for a number of reasons. one, you can get physical gold with your units. you can't with the spider gold trust. >> key point. >> and the tax rate on capital gains in our vehicle is 15%. in the spider gold trust, it is 28% because the irs considers it a collectible. therefore, it taxes it differently. >> you are kidding me? oh, i did not realize that. that is important. >> and huge difference. and the third major difference is that the counterparty the owners is the royal canadian mint where we store the gold and i assure all of the listeners that every bar is there. it is not a leverage for a financial institution. it is a part of the government of canada, and the risk of that institution not having the gold is remote. >> yeah, but why would i want to
put money into gold today given that that, too, has had a tremendous run-up? >> sure, sure. it is the investment of the decade. >> yes, absolutely. >> hands down, and notwithstanding central bank selling it all decade long which is not a brilliant move looking backward. >> absolutely. >> but i would say that gold looks even better today than it has ever looked. we have sovereign risk on the economic map today that we didn't have on the economic map before. as i look at the problems in greece, and i see people taking $4 or $8 billion out of the banks because they are worried about the government and taking the money out of the banks and maybe it will move to the other countries, where do they put the currency? so, we can see that lots of people are putting it in gold including some of the smartest investors in the world these days. >> and you have seen some of to smartest investors put their money into mining and not just gold. so where else do you see
opportunity? >> well, we love silver, obviously as an off shoot to gold, and silver will act better than gold. there is not as much silver inventory in the world as gold inventory, and i am not a big proponent of the cyclical metals, copper, zinc, and nichol. >> well, it has probably tripled off of the bottom, yeah. >> and i worry thabt theabout t financial crisis that we are supposedly out of and that we are not out of it. we have moved things from the private company space to the public company space by -- >> oh, yeah. >> by the governments taking over the fannies and the freddies and the aigs and the whatever, and the europeans bailing out the banks and the british bailing out the banks and the focus is now back on the government. so, we will see how long those governments, people will continue to buy their sovereign debt. if they stop buying the sovereign debt, then the reason
we are owning gold will become more and more apparent. >> final question here. when you look at the overall portfolio, what should it look like? majority in the commodities? you are looking for a long-term secular negative story here, but what is the catalyst? because we are seeing the market climb even though you have fundamentals that are fragile in terms of the econ koconomeconom >> of course, we are running a hedge fund, and the longs are doing better than the shorts, you are okay. >> yes. >> and you were going to ask like how deeply involved should you be in precious metals. >> i will only give you my experience. we have 40% long on precious metals and 30% long on precious metals stock and 20% in oil and gas and the rest is miscellaneous. so we are essentially all-in. we probably have the most levered position to those products that you could imagine. >> what is the catalyst to move the stocks lower? i know you are looking for the market to crack? >> well, i think that if a
problem of slowing in china happened, then you know the chinese market peaked out in august of last year. >> yes. >> it has not gone anywhere and their market doesn't look like it's buying into the chinese experience as much as we are buying into the chinese experience. >> and then of course, the greek issue. >> yes. >> eric, we so appreciate your joining us today. >> thank you, maria. >> the pleasure is ours. eric strott trades under the nyse symbol of pyss. for those looking to buy into gold, you can also buy into the e, t etfs as well, and all of those names carry actual gold bullion, and you can see there is not a price difference between them. and how well is the gld is performing over the last three years, and once again, we are looking at a positive performance. what we have got is 35 minutes before the closing bell sounds on wall street, and the dow is
up 22 points and the nasdaq is high as we await google earnings after the close. and meanwhile, the heavy hitters in the m&a world telling us if more deals are on the horizon and where specifically the consolidation will be. we will be back in a moment. (announcer) roundup extended control does two jobs... at once. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control.
well, in case you are not aware, christopher dodd is on kudlow tonight, and tune in for that later. meanwhile, david faber has been taking the pulse of the m&a market all day and speaking to heavy hitter ins the big easy. he joins us now. >> thank you, simon. that is right. right now i am joined by the long time partner of activism. so, i'm curious, we have not seen too many kopcorporations tn over by activism. are you seeing it again? >> well, what happened with the
money coming out of the hedge funds and the key tools that the hedge fund activists were using to go after boards and management was lever up the company, pay a big dividend or do stock buybacks. and all of that financial reengineering sort of went out of the window when the credit markets completely seized up at the end of 2008. i think that there's no doubt that we will continue to see activism and it will come back in the last quarter. we have heard that there have been a lot of in-flows back into the hedge funds. so, i think that there is no doubt that we will continue to see it, and one of the lessons -- >> and more than carl icahn? >> well, obviously, we have a couple of things. we have icahn at lionsgate, and ron merkel at barnes and noble.com, and i think that one of the lessons right before the financial crisis was that operational activism which is
the non-financial engineering activism is actually very hard to actually make money out of and make work in the short term, and most of the hedge funds actually do have short-term time horizons. >> it is not the nelson pelts in the world who own them for a short time, and most of the huj funds looking for a quick turn. >> and the long-term, and then you have the experience of a fund like tci which went after csx which won five seats on the board, but at the end of the day, it was not, it was sort of a peeric victory for them, because they did not run for re-election at the next annual meeting and they have had a lot of issues with their own fund, and that is a lesson learned. i am not sure that we will see in the short term everybody piling on, because the tools are not there in terms of being able
to argue for leverage as being a good thing in and of itself. >> right. we also have not talked that much today and i would love to get your opinion of the global nature of m a&a and the comment at the conference would lead everybody to believe it is a global business and not just a domestic business here in the united states. are you seeing it in the pipeline? >> we are seeing it a lot. as you and i have talked over the last 14 or 15 months a about this cf tariff situation. >> i would point out that the last guest represented cf and we are thankful that you figured it out and it is done. >> yes, actually, they are closing the back end merger today, i think. but we saw yarro from norway come into the process and more cross-border deals. there is no doubt about it, we will see more of that as the market sort of recovers. one of the interesting things
longer term is going to be before the financial crisis hit, there was a lot of the activists investors in corporate governance activists in the u.s. argued that we should look more like the uk. the uk system is board passivity and very little in the which of things that a board can do to give itself time to find an alternati alternative. >> we saw that in kraft and cadbury where they seceded to the demands largely because the shareholders said you have to. >> that is right. what we have seen in the fallout from the kraft/cadbury situation, is that there has ban rethinking in the uk interestingly enough about whether their rules make sense, and there is a proposal from the labour party that maybe the minute that the bid is launch and all of the shares trade, then maybe the shares should not have the same rights as they have in the hands of a long-term
invest investor, so they are reeling from the effects of the rule while we have a contingent here in the u.s. saying we should be more like them, and right now, we have ruling that give the boards much more latitude and state-by-state, there are differences as to what you can do. >> of course. no change immediately in those things? >> no change immediately. what we are seeing right now is as the financial markets are recovering, you can get the deals done that are more highly levered and not to degree they were in 2007, but at least they don't have to be investment grade to get financing. so, we are seeing an uptick in m&a and hopefully that will continue. >> thank you, faiza sayed. >> thank you. and maria, back to you. >> flatlined toward tend of the session, but a phenomenal market. >> yes, ahead on the "closing bell," we are in the middle of earnings season and should you buy shares of bank of america, ahead of the earnings report
tomorrow? we have more on that coming up. and also, byron weem says that the interim treasury yields are going much higher and let's not forget his surprises. we will have more on that. and the google numbers will be broken down at the top of the the hour and we will give you investor reaction to it. stay with us.
all right. we are looking at a market that is deteriorating from the highs. the s&p 500 just turned negative and we have 25 minutes before the closing bell sounds. and the dow has given up a earlier rally and struggling to stay positive here as you can see from the chart. some of the banking stocks have rolled over. for example, bank of america is negative right now, and itas higher earlier. and jpmorgan and citigroup and american express, they, of course, are dow components. goldman sachs, also, negative right here. and nasdaq is also higher, but it, too, well off of the highs of the afternoon and we are waiting for google earnings, and that stock is off by .33%.
that is showing a level of 1210 giving up all of an earlier rally. if you are one of the hundreds of thousands of people who bought apple's ipad you should not take it with you if you plan to go to israel, because israel is banning imports of the device because of concerns that it is strong wireless signals disrupt other devices. customs officials have confiscated 10 ipads from tourists and will continue to do so until they can certify that the device complies with local transmitter standards. google ready to release first quarter earnings, and now jim goldman will take a look at what wall street is expecting. jim. >> maria, good afternoon to you, and headline numbers to watch for in 30 minutes from now or so. $6.60 a share and the shares are continuing in the rally and approaching $600 a share. and we should see pay clicks
with a year over year increase, and cost per click 14% higher. and marketing suggests that research advertising should get a bump. and option actions in google shares inld kate the likelihood of extreme volatility when the news comes out, and news na will affect the microsoft, yahoo, and buy daidu and android. google's report is coming right at the close of the top of the hour, and as you said, maria, we will have complete coverage. thank you, jim. >> jim, time for the "fast money" call. here is a woman who will not sleep very well tonight. karen finerman is from the "fast money" team and a major stake, and karen what are you looking forward to in tomorrow's earnings. >> we are in bank of america, i think that we are looking for strong earnings and as we have talked about, it will continue to raise and on the back of the
earnings on the back of the jpmorgan earnings, i am not that optimistic of bank of america trading up tomorrow, and even if they have earnings, but they should do well. >> so, what are you going to do with the position then? >> well, for us, i do want to add, that i would not add in front of earnings and i will wait and hope that they have good earnings and that the stock trades down which is exactly what happened last quarter. and if i can be in this for the long term and just continue to own it, it will be a higher base every time before the earnings and that will work out fine in the long term. >> and obviously, quality improving and earlier indications from the quality earnings that you mentioned, why would you stick with bank of america rather than the other names? >> bank of america is a premier franchise and the earnings power is just incredible. and the share count, we can even see further improvement in the earnings and it is cheap. it is one of the world's great franchises and it is cheap. it is pretty straight forward to
us. >> what price target do you have? >> i think that the shares could trade 25 in the next year and that would not be shock at all. you know, if they continue to improve credit quality and not expensive there, but more in the fairly valued range for us. >> all right. karen, we will watch with huge interest what bank of america reports tomorrow. >> on tonight's "fast money," all of the afterhours action clearly on google and plus the latest on the company's conference call and the hedge fund trade of the week and why the heavy hitters are betting big on the 3d name. and melissa and the traders are live at 5:00. maria. >> we have 20 minutes before the closing bell sounds for the day. it is financials rolling over to take it down. dow industrials are up by just three points, simon. >> and the global economy is showing signs of life, but could to political efforts here in and abroad slow the healing process? >> and is continental about to swoop in and take away the merger talks with usair?
welcome back. hold builders turning more bullish on the housing market and the national association of home builders sentiment index rose four points in april to a reading of 19. it was better than expect and the highest reading since september, because consumers are rushing to take advantage of the home buyers tax credit before it expiresch it is not all good news on the home front. sales were down 19% last month. we have diana olick with more. >> well, the bank repossessions reduced the numbers in march. realty tracks reports that on 300,000 properties in march is up 18.9% of bank repossessions. that is nearly 250,000 properties taken back by the banks. i want to gauge how this afts the overall economy. existing homes for sale at the end of february was 3.59
million. at the current pace roughly 300,000 homes sell every month, and think about the fact that the bans are repossessing 300,000 in q-1 and it is three months, because that number is surging as we speak. >> we don't think that we will see a flood of foreclosures hit the market at once, causing another v-shaped drop in home prices, but the most likely scenario is that we have probably 3 to 4 million distressed assets that are going to have to be disposed on the market. and they will do over the next few years. >> now n some of the hardest hit areas like in las vegas and phoenix and parts of california, banks are holding on to the repossessed properties and releasing them slowly so as not to hit the prices hard, but the more they repossess, the more they have to put out on to the market. for more, obvious, go to the blog realtycheck.cnbc.com. maria? >> well, thank you, diane. that despite an unexpected climb in the job rates, many are still
projecting and up tic. so, what does this recovery means for investors? joining me is byron weem, chairman of the backstone advisory services. byron, always a pleasure to have you on the program. >> great to be here. >> i want to talk about the fundamentals and where you are in the ten surprises as well. i am still thinking about the pen since you made that one of the surprises. i will get back the that in a second, but why is higher job creation is coming? >> well, maria, look at it yourself, the news on the economy is the really pretty good. it has been flowing better than expected since the beginning of the year, and industrial production is up, and you have profits probably up for the first quarter 30%, and corporate profits, so inventories are down, and the export rus are up and every signal you look at, the most surprising is the consumer. retail sales are a lot better than anybody thought, and
eventually, that is going to lead to job creation. >> that is already one of the reasons that the market has been anticipating better times ahead. and you have the dow passing 11,000, and the s&p 500 passing 1,200, and are these levels significant at all or are they just psychological, and let me ask you this, is all of this good news that you are talking about baked this the cake? is it already priced in give the fact that we have seen the run-up on the anticipation? >> well, one of the ten surprises is that the market would get to 1,300, and i am not backing off of that. >> yeah, why would you. >> so, we have further upside to go, and i don't know what the second half will be, but i'm worried in the second half, you will see rising interest rates, and that the prospects for 2011 may not be as favorable as those for 2010. >> so, what sectors then do you want to invest in to take advantage of that? do you want to buy the spdrs or to take advantage of the s&p 500
to move to your target? >> that is going to work, but look, there are some sectors that i prefer, technology which is probably crowded. oil is not so crowded. materials, and i'm positive on materials, because of the emerging markets. and i like health care. >> all right. let me ask you abouting somethat you wrote recently, because in the latest note you wrote that you are concerned about u.s./china relations, but they have improved. >> right. >> what should the investors take away from the situation, because we know that friction is there on a number of levels on the currency issues and the google story, and what is important from a investor standpoint? >> well, the important point is that hu jintao came to the nuclear summit and met with obama, and i think that there were a number of things that happened, including meeting with the dalai lama and selling arms to taiwan and pressuring china on the iranian sanctions, and
accusing them of currency manipulation that upset them, but now there is a conciliatory tone which is favorable, because we are selling an auflt lot wfu bonds this year, and china is a big buyer of them. >> so, you are saying it is positive that things are improving and positive as an underpinning for the stock market? >> ritght. >> as far as investing in the asian story and what a gdp number out of china yesterday. how do i make money out of that? >> well, the merging markets are gaining every year in gdf. so i like china, india, and brazil. ju you have to expose yourself to plenty of volatility, although there is a lot of volatility in the u.s. >> but volatility is low in the u.s. so maybe some volatility, but are you worrying about the
volume being so anemic, byron? >> well, people are confused and afraid to act. that is setting the base for an opportunity. >> and where do you stand with all of the cash on the sidelines? we had a bit of a debate about this a little while ago that there is so much cash on the sidelines and some of it is not moving into the market and does it stay on the sidelines? >> yeah, i have never really thought that all of the money in money market funds was anything more nan an interest-bearing checking account. but i do think that there are institutions have some cash, and i do think that as the fundamentals continue to improve, they will deploy it, and that is why i think that we can get to 1,300. >> let me ask you about japan, byron. that is one of the ten surprises that you think that the japanese market average will be the best performer on a global stage. you still believe that? >> well, it is not the best performer so far, but it is holding its own. >> yeah, it is doing well. >> doing well, but the fundamentals enwhi wro s when i had not started to improve, but
now profits are improving and exports are very strong and even employment is improving so i think that one is going to come through for me. >> all right. we will keep watching it and hope you come back soon, byron. appreciate your time. see you soon, byron weim joining us from blackstone. up next, we will explain how you can profit from the britain's looming election. back in a moment.
welcome back to the "closing bell." i'll phil lebeau with breaking news from toyota. cnbc has confirmed that cnbc will suspend production of the lexus 4g at the point where it is built in japan. they stop production of the lexus gx 460 as they test the electronics on the suv. the tentative plan to rejum on april 28th, but between tomorrow and april 28th, the production of the lexus gx 460 will stop. simon, back to you. >> thank you, phil, with that breaking news. there is an election in the
british government, and so desperate is the politician to save himself, that the uk became overreliant on the pound. separately, gordon brown spent time doubling the british health service which is structural spending which is hard to cut. and that lethal combination will leave the uk with a budget deficit greater than any country on earth, and 13% of gdp, and because britain is not in the euro zone, the pound is fully exposed to take the strain of repricing uk debt to make it attractive. in fact, the pound is down 7% since august. some say it is undervalued and
bears predict that it will be $1.30 by the end of the year which is another 15% down from here. and for now the bears are held back by fear that the opposition david cameron will become prime minister, and he has threatened an emergency budget in 15 days to raise taxes and cut spending. and sterling to dissolve for three reasons. first, he promised that austerity and the market fears is a hung parliament in which no party holds the balance of power, and in that, the uk sovereign debt will be downgraded. secondly, david cameron seems to do a u-turn on the austerity on the votes of needing clarity for down riding or cuts needed if any. and this is the blow, that unlike here in the united states, the uk is nowhere near raising the possibility of
double-dip, but bank of england continues the quantitative easing and probably the last to raise rate as well. so the pount has neither a growth nor interest rate advantage against it. and if cameron launches a emergency budget with teeth, he could plunge the uk back into recessi recession. maybe you think that the selling is overdone, and you can trade the pound on fxb. short it if you think that the pound will fall, or if you are looking for other shorts in the market to cover, maria. >> this is increasingly an investor story. >> yes, potentially. particularly on the short side. i of course am longer, because i have my houses in the uk. we will be right back with the closing countdown. and we are moments away from the google first quarter earning report. and we will break it down and show you what the stocks do in the extended hours. you are watching cnbc first in
continues with maria bartiromo. and it is 4:00 on wall street, do you know where your money is? hi, everybody. welcome back to the "closing bell," i'm maria bartiromo at the new york stock exchange and the stocks are on the verge of rising for a sixth straight day. stronger manufacturing data offsetting increasing jobless claims, but it was close. we will have more on the trading in a few minutes because the market was very, very vulnerable before the close. although we did see money coming in and the dow finishes up better than 20 points. google's first quarter earnings are due out any minute and we are wait on the numbers. the company is expetted to report a profit on revenue of 4.9 billion and we are waiting on amd and we will have that those numbers as well. they are expected to report a loss for the quarter of four
cents a share on revenue of $5.4 billion. we will get you the numbers coming up as they are reported and give you investor reaction. let's get a preview of what to expect with cnbc's jim goldman and rick munares with the motley fool, and also is the chief investment officer at pool ip vestment. so, lee, what are you expecting out of the quarter? >> well, i am probably expecting a blowout quarter right now, and what i am looking for, maria, i want news about china and anything that would cause the analysts to start to panic. the bottom line is that google is a solid company and they can lose all of the chinese revenue and fit brought -- if it brough stock down, and we saw a run-up and hit the target, and now i'm looking for $660. >> well, it is $6.06 is the